In which we discuss his role signing Jeremy Lin, the final $450M price tag for the Warriors, praise for Larry Riley, statistical analysis in the NBA and many other topics.

—–JOE LACOB, third and final part of interview transcript (moved some of the questions and answers around in order)/

-Q: Let’s just confirm that you made the call to sign Jeremy Lin.

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-LACOB: It was my call.

-Q: Is that an example how you’ll be involved?

-LACOB: I’m going to be involved in all aspects. People are going to run their part of the business, but I intend to be involved.

-Q: Why Lin?

-LACOB: Well, that’s a special situation.

-Q: Your son played with Lin? Against Lin?

-LACOB: There were probably three guys that were pretty much the best point guards in high school in this area at that time and Jeremy Lin was probably the best of them. And my son (Kirk) was right there with him. I’ve watched them play against each other and I’ve coached against him since he was this high.

So I know him from a little kid. Also at Palo Alto I watched him win the state championship over a superior team, and he dominated it. Mater Dei. And he has heart, he has a lot of talent, he’s athletic, which a lot of people don’t understand. He’s pretty long.

He has a game that translates to the NBA. He can drive, he’s a slasher. He needs to shoot better, obviously. He needs to be a better outside shooter.

It’s funny, people don’t know his game. They say, oh, he’s a shooter but he doesn’t have these other skills. No, that’s not true, it’s the opposite.

Jeremy Lin, I think can play. He didn’t sign because he’s Asian-American. That was a nice feature, like anything else. And I think it’s great for that community and for the Warriors. But he got signed because he can play.

If you watched his tape, if you watched him in the John Wall thing in Vegas, he played John Wall even up. This is not a guy that shouldn’t have been drafted. This is a guy that should’ve been drafted.

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-Q: Doesn’t that put some pressure on a coach to play him?

-LACOB: No, he’s got to prove it on the court.

-Q: You’ll be watching.

-LACOB: That’s not for me to determine. He has to prove it, coaches have to coach him and we’ll see.

Jeremy should’ve obviously gotten recruited to Stanford. Made a huge error. And by the way, there were a lot of us who were Stanford boosters who were trying to get them to recruit Jeremy. They did not. Well, guess what, that was really stupid. I’m a big Stanford fan, but that was really stupid. The kid was right across the street. You can’t recognize that, you’ve got a problem.

-Q: You’ve said you won’t be a luxury-tax team. Does that mean you’d never go into luxury tax?

-LACOB: It doesn’t mean ever.

-Q: Are you in any way under-capitalized, to the point you have to keep saving money on payroll vs. richer teams?

-LACOB: No, are you kidding me? I laugh when I hear that kind of stuff. The collective balance sheets of the ownership of this group is multiple billions of dollars. It’s not their last dollars.

-Q: Fans want wins, not balance sheets.

-LACOB: Fans want to win. But what I am taking issue with when I made that point is that just spending money, just the willingness to spend a lot of money, doesn’t mean you’re going to be better. You still have to be smart.

-Q: Smart and big spending has led to a lot of success.

-LACOB: We will do, within reason, whatever it takes to be a winner here. But I don’t happen to believe that spending tons and tons of money necessarily makes you winner. You have to be smart about how you spend it.

-Q: Oklahoma City isn’t a big spender…

-LACOB: Oklahoma City’s going to be a great team, and they’re way under. I think we have to be smart.

-Q: How strange is it to end up with a team that everybody—including Larry Ellison—thought Larry Ellison, fifth-richest man in the world, would end up owning?

-LACOB: I think he’s sixth. (laughs) Yeah, I mean, sure, I think everyone expected if he wanted to do it he probably could’ve written whatever check he wanted to and done it.

-Q: Did you end up paying more than you wanted?

-LACOB: I ended up paying what I thought it would take. Actually, that is the exact number I thought it would take, right from the beginning.

-Q: But it’s $50M more than the NBA record price.

-LACOB: No, it’s not. That’s not true. This is another one where you have to get your facts straight.

-Q: My goodness, that’s straight from Sal Galatioto that the Suns went for the record $401M, how can Sal possibly ever be wrong?

-LACOB: No, it’s not true. Phoenix was $401, but actually I can tell you it was probably a little higher than that. I know because I actually had the team bought and declined to go forward for a number of reasons and somebody else stepped into that role, Robert Sarver. I negotiated that price, I know what it was.

-Q: And maybe $450M for the Warriors is a little lower than actuality?

-LACOB: No, I’m saying their price that was quoted is probably a little higher. But is 450 a record? Arguably yes. But that’s an irrelevant fact. Because No. 1 the Phoenix transaction was six years ago—that’s a while.

No. 2, you have to ask the question, what happens if the Lakers, the Knicks, the Bulls, the Celtics… these kinds of teams… Dallas, if they were on the market today, believe me, all of them would go for more than 450 and maybe substantially more.

-Q: Are you going to make money on this proposition?

-LACOB: Oh yes. This is an incredible business opportunity. Turning this into a winner No. 1 and running this business better in certain ways… Look, sports franchises appreciate 10% a year on average over three decades, the last three decades. There’s no reason to think this won’t appreciate in value. So that is the least of my worries.

We will make money on this team in appreciation of value. We’re in one of the largest markets. It’s a great opportunity. If we are good at what we do as a business, we should do just fine.

Is it the greatest return in the history of the world? Perhaps not. You could put your money into… the venture capital business is an example, and make more money.

But you know, I’m doing this for more than just that. I’m doing this because obviously I want to have fun and I want to build something that is a winner.

And I want to be part of something that the whole community can appreciate and feel good about. All those things really matter. If you don’t want those things, you shouldn’t be a team owner. Because there are other businesses to invest in.

This is not about dollars and cents.

-Q: You’ve made it pretty clear you’re going to be making a lot of the decisions…

-LACOB: I’m going to have a lot of money tied up in this and a lot of my time, which is more important than my money. I’m doing that because I want to do it, because I’m passionate about it and because I think it’s a very… under-performing asset. I think it’s a helluva opportunity.

-Q: And you feel like you have some expertise in this.

-LACOB: I do. I’m sure there are other people that do, too. I think I do. But that doesn’t mean I’m going to try to make all the decisions. That’s why I said, I want to have smart people around me.

I’ve built a lot of companies in my day—25 years in venture capital. Let me tell you something, yeah, I made those investments and I had a really good return in my business, but it’s not because I did it all. It’s because I hired a great CEO or I hired a great whatever.

-Q: How important for your top basketball exec to be an established guy who has won elsewhere?

-LACOB: It’s important.

-Q: Or do you want an up-and-comer?

-LACOB: On the basketball side, I think there’s different ways to do it. You can recognize talent that has never had the opportunity and all of a sudden they become legendary because they’re successful. So recognizing young talent is one way to do it. Or hiring experienced talent that’s done it before is another way to do it.

We all know it can happen both ways. If you only hired experienced people, we’d run out of experienced people. So somebody young has to get a shot at some point.

I believe in giving young great talent a shot. But I obviously wouldn’t pass on a great experienced guy, either.

I’ve already said who I think who are great young coaches. I’ve mentioned a few in the league that are proto-types. Those people, before they got their current jobs, they were unknown. It was a risk. It was a gamble.

-Q: Do you have a GM prototype?

-LACOB: Not yet. To be honest, to be fair, I think Larry Riley has done a good job. He’s only been in this role for a little over a year. And he gets associated with, oh, he’s Nelson’s buddy. I don’t think that’s true.

I think Larry is an independent thinker. I’ve spent a lot of time with him so far. I think he’s done a good job, actually, and if you go ahead and talk to other people, you’ll find that they respect him.

Now, are there people in the league that are more accomplished? Yes. That have bigger names? Yes. Obviously if you could have—name a name, somebody very successful, if you could have him as GM here, you’d say, oh, well, that makes sense because he’s done it before. And that could be the way to go.

I’m evaluating right now. But I do like Larry Riley so far. I think he might deserve a shot.

-Q: You’re saying nice things about Riley, nice things about Rowell, you’re talking to Nelson. People are going to read this and there will be some reaction.

-LACOB: I don’t know yet.

-Q: It could be that you’ll keep most of those guys? Keep most of the people throughout the organization?

-LACOB: I don’t know the rest of the people that far. I have to evaluate them. Do you know them?

-Q: I know some of them, but they probably wouldn’t want me offering my opinion to you. OK there are good people in there.

-LACOB: I think there are good people and there are probably some people that need to go, OK? From what I’ve heard. But I need to see it first hand.

It’ll all… people are going to have to be a little patient. I know they want to see change. You’re going to have to be a little patient because there are certain things that are going to preclude us from doing things right this moment.

And then when we get in there, the right thing to do is to meet all the people and evaluate and then make decisions.

And before you know it, it won’t be long, believe me, the people who can’t do their job are going to be gone. You don’t have to worry about that. I’ve been doing this a long time with different companies, and if you can do your job, you’re going to be very rewarded.

-Q: Whether or not the Warriors leaders have actually been terrible at their jobs, the general perception is that they’re mostly horrible. Are they perhaps permanently tarred with that perception so much that you can’t have a new start if you keep them?

-LACOB: I think it’s a factor that has to be taken into account.

-Q I understand you play some poker. Does some of that strategy blend into running an NBA franchise? What do you like about poker?

-LACOB: I’m in the venture capital business and have been for 25 years. We do a lot of diligence and a lot of assessing of things. We do our homework. We’re analytical. But in the end, you’re starting businesses when there’s a lot of unknowns when you do start-ups. No matter how much analysis you do, there’s always going to be things you don’t know.

And what makes somebody good at this business, vs. somebody not good, is the ability to take risk. Calculated risk. And to be OK with that. To be a gambler, to some extent.

I think that yes, I like poker. I like the idea… of calculated risk. Doing my homework, and then you have to take a shot. You learn a lot in poker about people. Phil Hellmuth is a good friend of mine and you learn a lot about people when you play that game.

And by the way, venture capital, sort of similar. You’re making a calculated risk on whether you’re going to put your money on this company or put your money with this person. You have to be comfortable with unknowns.

I think this is al the same thing. This is another level, another game. The business of running a basketball team, there are some things you have to analyze and assess. Do your homework. And then, when you bring on certain players, you’re taking on a little bit of a gamble. They’re human beings, they’re not robots. You don’t know how they’re going to react and play together. You don’t know how the coach is going manage that group of players.

But you can be smart about the architecture and get all the pieces in the right places, and then you’ve got take your shot. Sometimes you have to take a risk.

So I kind of view it all as a little bit of a chess game, right? It’s no different. Just different levels. It’s easier actually in the NBA—there are more knowns than there are at a poker table and there’s more knowns at a poker table, frankly, than there are in venture capital.

When we start companies, believe me, there’s a lot we don’t know.

-Q: Have you played in the World Series of Poker?

-LACOB: I’ve always wanted to play in the World Series of Poker. I’ve played in a WTOP event, one of the major ones, last fall, I think. And I did pretty well, actually, for an amateur. All 350 pros at the Bellagio. All the major pros were there. Think I finished 78th out of 350, almost got in the money. That was pretty good. It was fun.

It’s not about making quick decisions, necsesarily, here. But it is about making bold decisions. I do think we need to make bold decisions. When the timing is right, when you’ve done all the calculating, you can make bold decisions.

I think you can expect this new ownership group to go for it, at the appropriate time. You know, maybe it’ll be this year, or next year. We’ll make a bold move and I think the fans will be pretty excited by it.

May end up turning out to be good, may turn out to be bad—hopefully good. But we will make some bold moves. We are not going to sit around and be a marginal NBA team. That’s not happening.

-Q: All you need is to find your KG, should be easy…

-LACOB: They don’t happen every day, those opportunities. But when they’re there, you have to recognize it and you have to seize it…. It was very calculated. It wasn’t a given we were going to get it. But it was calculated. It was a hand played out.

-Q: Are there advanced statistical analytics that you particularly like?

-LACOB: I do like the statistical approach to sports. I think in baseball, it’s particularly relevant. The Billy Beanes, Theo Epsteins… I admire those people a lot.

I think it also can work in basketball. Probably not to as great an extent, although I don’t think people have explored the boundaries yet.

There’s one great guy, I think, in basketball, Daryl Morey, who came from Boston, by the way. You know him? Daryl’s very good. I think there’s room for more of that. But I don’t think it’s the only thing you can depend on.

-Q: It’s a developing thing…

-LACOB: It’s another piece of data.

-Q: What stat do you like?

-LACOB: There’s a bunch of stats. I’ll give you an example of one: If you look at college players–my son and I do a lot of this stuff, he’s a stat maniac.

And I don’t know if you know this, but this hasn’t been pointed out in the press yet, but one of my degrees is in statistics. I have a masters in something called epidemiology. I have an MBA, but before that I did a masters in epidemiology, which is the study of disease distributions in populations. It’s all about statistics, it’s bio statistics, they call it. So I have a statistics kind of background.

Which is why I’m into poker thing, and the cards and all that. I’m a very statistical-oriented guy.

I do admire all that. I think there’s a place for it. And we’ll probably be doing quite a bit of that.

-Q: You’re going to tell me about college rebounding…

-LACOB: I like guards that can rebound, for instance. Rebounding translates to the NBA verywell. If you’re a good rebounder, you’re a good rebounder.

-Q: I knew you were going to say that.

-LACOB: That’s why I like Landry Fields coming out of Stanford here who I think is going to be very good in New York for the Knicks…

Landry Fields I like as an example. He was overlooked I think in the draft a little bit because he’s a guy that’s 6-7, that obviously, if you watch him play, he has guard skills, NBA guard skills, two-guard. But he rebounds really well. He was 22 and what 9, last year?

He was the leading scorer, too, in the conference, by the way. There’s a guy as a big guard, may need to shoot a little better in the NBA, but he rebounds the ball. I think he translates to the wing position pretty well in the NBA. If he’s athletic enough, which we’ll have to say, could play.

That’s one example. He’s a local guy, I happen to know him, so everyone here will know. But I think he can play.

pain train totally on the money….good interview….his answers left everything wide open but i was pleased to hear him say he like riley…as i have mentioned many times…he has exceeded my expectations and managed to make some lemonade out of lemons….rowell should be gone before the ink is dry…he is really a stiff…maybe he knows debits and credits but that is where it ends….stronger than ever on bringing in strong president and hiring van gundy to coach…simmons article in sfc was awful regarding beans…beans said again what i have been saying for years..fatboy is at the root of so many problems…yes the so called injuries are an indication how some guys do not want any part of being around this guy….he plays with their heads and that game ran off some very fine talent…he has gotta’ go asap

http://www.superspacecat.com Bruce Tritch

The Warriors actually have had a small bit of planning and continuity the past few years: Nelson was grooming Smart to take over as Head Coach. I see Smart as an Avery Johnson, and I think Nelson knows it. If Mully was still with the Warriors, the anti-Nelson faction would be much much smaller. The Warrior bigs will be better this year than any other time this century, in large part due to Riley. So I’m willing to be patient. See if Lacob can hire West or Bird after this season and go with Nelson this year and Smart next year. Riley can stay until this season is over. Fire Rowell now and re-hire Mully. Don’t throw out the baby with the bath water. Let the Great and Powerful Lacob mediate Riley, Nelson, and Mully this year and transition to Bird/West, Smart and what ever combination of Riley/Mully/someone else next year.
Hey, at least I have a plan!